TORONTO (miningweekly.com) – TSX- and JSE-listed First Uranium has started commissioning the uranium plant at its Ezulwini mine, in South Africa, and expects to produce the first yellowcake during the current quarter, CEO Gordon Miller said on Tuesday.
The company has also “substantially” completed a shaft-refurbishment programme at the mine, which will mean the shaft can be fully utilised for underground mining and development, he said.
The next milestones for the firm will be to commission the second gold module and initial uranium modules at the Mine Waste Solutions (MWS) tailings recovery operation, which are scheduled for completion during the first quarter of the company's 2010 financial year (April to end-June in the current calendar year).
Finally, the firm plans to complete a third gold module and third uranium module at MWS in December, which will increase the plant capacity to 1,9-million tons a month.
If all goes to plan, both Ezulwini and MWS will be generating positive free cashflow by April 2010, Miller said on a conference call.
During the quarter ended December 31, First Uranium sold 12 581 oz of gold from MWS, and 6 411 oz from Ezulwini.
The firm has also concluded a gold-stream agreement with Vancouver-based Gold Wheaton, which will buy at least 20 000 oz of gold this year from the MWS operation, and then an ongoing 25% of the life-of-mine gold output.
Gold Wheaton made an initial $50-million payment in December, and First Uranium expects to receive the second tranche of $75-million on or by March 12.
First Uranium has also announced a C$61,5-million private placement, which, together with the Gold Wheaton funds, “will mitigate most, if not all of the financing risk that would otherwise confront us in the near term”, Miller said.
Shares in the company rose 1,3% on Tuesday, to C$4,79 apiece by 15:49 in Toronto.